Sanjiv Goenka appointed Firstsource Solutions chief

KOLKATA: Firstsource Solutions Ltd (FSL), an IT BPO company recently acquired by RP-Sanjiv Goenka group, has appointed Sanjiv Goenka as its chairman. Son Shashwat has also been inducted as a director on the board of the Mumbai-based outsourcing company.

The move is part of the attempt to restructure the board following its acquisition in October 2012. "This will be Shashwat's first entry on the board of a group company as director post his involvement with my business for sometime now," Sanjiv Goenka told media persons on Friday.

Some of the other directors appointed on the board include Haigreve Khaitan of Khaitan & Company and Subrata Talukdar, executive director, CESC. They will replace Pravir Vohra of ICICI Bank, Ram V Chary of Metavante Investments Mauritius and Mohit Bhandari of Aranda Investments (Mauritius) who resigned from the company's board from December 5, 2012.

Firstsource Solutions chairman Dr Sailesh Mehta will continue as an independent director. Goenka further added that the company has repaid outstanding foreign currency convertible bonds (FCCBs) worth $237 million (around 1,294 crore). The repayment, due December 4, was funded by way of the company's cash reserves, augmented by the preferential allotment of shares made to Spen Liq Pvt Ltd.

The equity infusion was made by the RP-Sanjiv Goenka group's electricity generation and distribution firm, CESC, which announced its plans to acquire a controlling stake of 34.5% in Firstsource for up to 640 crore in October.

Firstsource Solutions' thrust will be to grow revenue earnings through value additions and improve margins to 8-10% annually. The company's margin has improved quarter-on-quarter over the last two quarters but Goenka feels there is scope for improvement. "We believe that revenue per employee can go up," Goenka said.

Firstsource Solutions' acquisition will boost 13,000 crore RP-Sanjiv Goenka's revenues by 2,250 crore, add significantly to the group's profits and treble employee strength from 16,000 to 48,000. In H1, FSL's revenues grew by 31.9% to 1,392.8 crore over year-ago period, EBIT by 76.2 % to 78.6 crore and profit after tax by 102.2% to 64.9 crore.

"We will continue to focus on telecom & media, healthcare and banking & financial sector in the near future, presently contributing 44%, 31% and 24%, respectively, to our total revenue," Goenka pointed out.